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Boosting Employee Morale
The Paperless Shop
Creating Lasting Customer Loyalty November/December 2013
Steve’s European Automotive Where Customer Service Is A Daily Devotion
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02-04 Contents SO_Nov 12/3/13 2:33 PM Page 2
®
November/December 2013
Shop Profiles
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22 Steve’s European Automotive, Waterford, MI 42 Japanese Auto Masters, Virginia Beach, VA
Features 6
The Paperless Shop
Shop Profile: Steve’s European Automotive
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Technology: -The Paperless Shop
30 Shop Management: -Managers Set The Tone For Employee Morale 34 Executive Q&A, Part 1: -Up Close With Art Blumenthal, Aftermarket Business Broker Managers Set The Tone For Employee Morale
Sponsored by
Shop Profile: Japanese Auto Masters
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®
Departments Shop Owner Staff
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Executive Interview: Carolyn Cook, ACDelco Shop Operations: Selling Multiple Repairs Customer Service: Creating Lasting Customer Loyalty
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In Memoriam
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Founder of Babcox Publications
Edward S. Babcox (1885-1970)
Chairman
Tom B. Babcox (1919-1995)
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|Technology|
by Uwe Kleinschmidt, CEO, AutoVitals
The Paperless Back Shop Mission Accomplished! Time flies and here we are again with an update of our mission to make the back shop completely paperless. Of course we save trees by doing this, but the most exciting benefits are about boosting technician productivity, freeing up the service advisor from doing busy work and focusing on educating the motorist.
Customers are impressed by the professional look of the results presented at the counter or electronically and, believe it or not, would like to be educated by learning more about the inspection results. The next step is obvious: Technician worksheets and inspection sheets are now combined and available on a tablet, which is the newest tool to be added to the tech’s toolbox. The tablet is not only replacing paper, it also has the potential to replace computers at fixed locations in the back shop. I welcome your thoughts at on how you would like to take the next step. Provide your comments at www.AutoVitals.com/EIS_Benefits.
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Step #1 – Fast Finger Action Replaces the Car-Doctor Scribble and Even Typing. This step is all about leveraging the digital world. • One paper sheet can hold only so much. And most shops try hard to fit everything onto one page to simplify logistics and processes. So in order to accommodate all possible scenarios, the digital world offers plenty of space (infinite space, so to speak) for the tech to leave notes, and scribbling is replaced quick tapping — and they’re done. • A picture speaks more than a thousand words. Especially when the motorist is eager to learn what exactly is wrong with his/her vehicle. Of course, one can take photos of the problem area with a smartphone or a camera, upload it somewhere and then
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attach it to an e-mail to be printed out. Or, one could simply press a button on the tablet and take the picture. Done. • Voice recordings, taken with Siri or its Android equivalent, turn spoken notes into text or one can simply record voice notes to which the service advisor can listen. They are very useful, especially when complex repair situations are to be mastered. • The service advisor traditionally shows the paper documents to motorists (“pardon the smudges, we are a repair shop and not a pharmacy”), or enters them into the shop management software (SMS) before showing the inspection results as part of the estimate. Digital inspections, on the other
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hand, can be modified by the service advisor, augmented with embedded images, and, even better, different configuration settings on how the inspection results are sent to the service advisor can save tons of time. How, you ask? Imagine the actions recommended by the tech are canned jobs already known to the SMS. Certain SMS can support entering job IDs instead of navigating through a jungle of menu items when building the estimate. The estimate is built in less than 30% of the time needed for the manual approach.
• Last, but not least, the electronic inspection sheet is built in such a way that the tech’s habit doesn’t need to change much. You can see how easy its operation is in the below image. One tap sets the topic to “Inspected and Passed.” This is an easy process and there are still measures built in to avoid “pencil-whipping.”
Step #2 – Bring OEM and SMS Knowledge to the Table(t). Integrating with your SMS and an OEM catalog of service recommendations adds the next category of benefits. • As mentioned earlier, canned jobs configured as a recommended action create one baseline for techs and service advisors alike. Reports for the shop owner allow unprecedented insight into how well techs and service advisor(s) work together to create a prof-
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itable shop operation, way beyond what today’s SMS is able to do.
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• Mining the data of the SMS database allows you to detect jobs and parts, which are performed and ordered very often for the same vehicle type and can be proposed to the tech. The tech can learn from more experienced techs or simply confirm the proposal and adjust work hours when needed. The service advisor then confirms or adjusts the tech’s proposal. • Bringing the vehicle service history
next to the OEM service recommendation on one page allows the tech to compare data quickly and select the recommended services by tapping the set of jobs or individual services. The image on page 9 illustrates how easy of a comparison those two sets of data can be. • Recalls and TSBs can be looked up and selected for the service advisor to recommend to the motorist.
Step #3 – Replace the Technician’s Paper Worksheet. What if the tech doesn’t need to carry the technician worksheet around? What if the service advisor only needs to create the work order and assigns it to the tech in the SMS and, a few moments later, both the worksheet and the inspection sheet(s) show up with the vehicle designation on the tech’s tablet? Welcome to AutoVitals Paperless Backshop service. It combines inspection and worksheet into one application on the tablet. Time clocking is made super easy, voice notes and images can be taken, the charged hours can be monitored and, last but not least, the tech’s individual efficiency score is visible and compared with the shop’s or even to the AutoVitals network’s best score. Check out the screenshot above and go to the Apple App store or Google Play to start your
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first inspection with the AutoVitals Paperless Backshop Application today. SO Uwe Kleinschmidt is the CEO and founder of AutoVitals in Santa Barbara, CA. The company’s Web-based services focus on the independent automotive repair industry. AutoVitals’ products facilitate highly effective Concierge Auto Repair services, covering all aspects of the service advisor’s interaction with prospective and existing customers. Highly effective and optimized websites, workflow support in the shop, as well as customer retention and social media services are just a few ingredients. He can be reached by visiting www.autovitals.com or calling 1-866-949-2848.
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Corporate|Spotlight|
Mudlick Mail Unveils New Tool To Track Direct Mail Campaign Results Direct mail provider Mudlick Mail has developed the Mudlick Analytics Program (MAP), a new tool designed to help automotive repair shop owners better evaluate their direct mail campaigns. The new reporting tool tracks the entire process of a campaign — from the mailing to customer conversion. “The Mudlick Analytics Program provides us with an effective method of showing clients the return on their investment by revealing which customers actually visited a shop after receiving a postcard — even if those customers didn’t redeem an offer,” said Mudlick Mail Project Manager Ryan Monson, who created the tool. The Mudlick Analytics Program ties into a shop owner’s Point-of-Sale (POS) system and gathers detailed information on customer visits. The tool can then cross-reference that data to determine the amount of revenue generated from those customers and whether those customers came from areas where direct mail campaigns were conducted. The information shows clients the amount of sales produced by a campaign as well as the percentage of customers that came in from which zip codes, allowing them to make adjustments if certain zip codes or neighborhoods aren’t generating a strong response rate. “This tool really gives shop owners an accurate snapshot of their campaigns. It’s about improving their experience and helping them
identify those “great” customers,” said Mudlick Mail President Tim Ross. The tool can also offer operators insight into their retention rates by examining the frequency of customer visits. Best of all, Mudlick Mail is offering the tool as a supplement to its existing services at no additional charge. Although only available to automotive repair industry customers, the company hopes to expand the use of the Mudlick Analytics Program to other markets in the near future. Mudlick Mail’s campaigns are developed using in-depth market research, allowing clients to focus on customers by income, geographic area and other key demographic details. Once Mudlick’s subject matter experts have helped a shop owner identify his or her target audience, the company then provides a turn-key suite of direct mail services to reach customers, including postcard design, printing, listing services, postage and delivery for one flat fee. Mudlick Mail also offers customers access to an online “learning center,” where they can find strategies on how to maximize the effectiveness of their direct mail programs.
Mudlick Mail www.mudlickmail.com
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14-16 Exec Interview_ACDelco 12/3/13 2:29 PM Page 14
Executive|Interview|
Carolyn Cook ACDelco General Director Carolyn Cook, ACDelco general director since July 2011, has been a field parts representative, regional parts manager, parts processing center plant manager and director of aftersales for Chevrolet Europe. Since arriving at ACDelco, Cook has overseen numerous enhancements to the brand’s 90,000-part portfolio and Professional Service Center Program, based in part from insight she gathered by meeting with warehouse distributors and independent service centers. Last month at AAPEX, ACDelco doubled the size of its booth to demonstrate the depth and breadth of ACDelco’s lineup and its continued commitment to providing professional support to help shops grow their businesses while retaining their independence. Shop Owner talks with Carolyn Cook.
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For independent shop owners looking for an aftermarket partner, what distinguishes ACDelco from competitors? First, we have 100-plus years of automotive aftermarket experience and a portfolio of 90,000 parts for most makes and models, ranging from GM Original Equipment to Professional and Advantage. Our customers have made it clear: They want to offer choices to price-conscious consumers without compromising quality and their reputation. Behind every ACDelco part is world-class technology, including longer-lasting, GM-exclusive FNC (Ferritic Nitro-Carburizing – extended life anti-corrosive) rotors, six-speed automatic transmission control modules that shops can reflash, and more. Our smart business support through the ACDelco Professional Service Center (PSC) program helps shops drive growth and efficiency while respecting
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their independence and allowing them to take care of their employees and their customers. PSC program participants get great parts; industry-leading technician training; creative point-ofsale materials, ebusiness and marketing support; purchase rewards through easy-touse promotions; and expanded consumer assurance such as vehicle towing and parts and labor reimbursement. Speaking of products, what new ones can you recommend to shop owners? The team is very excited about our all-new lineup of ACDelco Professional Remanufactured power steering components. It includes power-steering pumps, rack-and-pinion gears and steering gears that have been subjected to a very rigorous testing process and offer great warranties. At AAPEX last month, we also introduced GM Original Equipment transmission hydraulic control modules for GM six-speed automatic transmissions. Even if the modules don’t need replacing, shops are going to love the fact that with a special web program and interface tool, they can reprogram the transmissions right in their facilities. We also announced that the innovative ACDelco Illustrated Catalog of replacement components
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for millions of GM vehicles is available to select aftermarket wholesalers and retailers through the popular Epicor LaserCat 3 electronic catalog interface. That will speed the lookup process and, hopefully, shops will get the right parts faster. What kind of marketing are you doing? We took a look at the market and at ourselves, and concluded one of our greatest strengths is the trust distributors and independent service centers have in our products, our history and our brand support. We’re leveraging this brand equity in the “Trust is Earned” marketing platform we launched earlier in the year. Trust is Earned speaks to the confidence shop owners and their customers place in the ACDelco brand, and even the trust consumers place in
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themselves to select a service center that delivers capable, honest service at a fair price. We have Professional Service Center program participants who’ve served multiple generations of the same family. Earlier this year, the driver of an ACDelco Battery Marketer truck went out of his way to rescue the mother of a newborn whose car broke down in rush-hour traffic in Seattle. This is what we mean when we say “Trust is Earned.” We’ve also added a regional service chain program – such as tire stores – to our roster, because as they’ve added more services, we’re seen a growing number of consumers turning to them for all-over vehicle maintenance and repair. Chains that buy our parts receive training, a service diagnostic hotline, discounts on GM Service Information subscriptions, marketing support and more. We’re talking to consumers by targeting automotive influencers — those who know cars and recommend products to friends and family. We’re also energizing the brand for younger professionals by supporting NATEF (National Automotive Technicians Education Foundation) and GM ASEP (Automotive Service Educational Program). Terrific job opportunities await young, trained technicians, and we’d like to help them grow their careers with ACDelco. I’ve also charged our marketing
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team with getting the ACDelco brand out in front of young consumers. Although our brand is more than a hundred years old, we must find creative and effective ways to reach a generation of customers who associate us with their parents and grandparents. The challenge is that the paradigm has changed with this audience: They decide what brands are cool, not the other way around, and they don’t spend much time on mass media. So we need to be where they spend time, whether that’s on social media or in an experiential way. That will be a big priority in the coming year. Do you think rising new-car sales will hurt ACDelco and independent shop owners? At ACDelco, we have two things in our favor: We’re the only GM OE provider, yet our portfolio also services most other makes and models. With 90,000 parts, we’re very invested throughout the aftermarket. I also don’t see a downside for service centers. Our Professional Service Center Program participants tell us they’re writing as many repair orders as ever. Don’t forget, despite the uptick in new car sales, the average vehicle on the road is still more than 10 years old. That’s a lot of vehicles that need brakes, A/C replacement, steering and suspension repairs, oil changes, filters and transmission and engine work. SO
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Shop|Operations|
by Bob Cooper, president, Elite Worldwide, Inc.
Selling Multiple Repairs Guidelines For Success In today’s market, service advisors are faced with a number of challenges. One of the more complex challenges is when a skeptical first-time customer comes in for an LOF service, and the advisor discovers that this customer needs a long list of repairs. This is what most advisors refer to as the proverbial “laundry list.”
Unfortunately, most service advisors will do one of two things: either hold back some of the recommendations because they’re afraid they’ll scare the customer away; or they’ll
struggle through their presentations. So, here are six recommendations to overcome any obstacles during this process. 1. With every first-time customer, you’ll need to do a lot of fact finding. Beyond the standard questions you ask, you need to ask them how long they’ve owned the vehicle and whether they bought it new. You’ll also need to ask when was the last time the vehicle was in a shop, what it was in for, if anyone else drives the vehicle, and what their plans are for it. In essence, you need to discover if they plan on keeping it, and, if so, for how long. 2. Have a conversation with every first-time customer about your vehicle inspection process and how they’ll benefit. Take a moment to tell them about the qualifications of the
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technician who will be inspecting their vehicle, and let them know the inspection service is being performed for two reasons: to ensure there are no safety concerns, and to establish a baseline for what services may need to be done, and when. 3. When you build your estimate, always bundle all necessary repairs and services that are relative to each system on the vehicle — the brake system, suspension system, cooling system, etc. This way you’re prepared with a price for taking care of everything that needs to be done in each of the systems. 4. We all know that when we start a sales presentation, and the customer senses they will need a number of repairs, they’ll get anxious. They’ll then immediately ask for a price, or they’ll tell you they just want the LOF service done. Sales tip: Always ask for permission to talk about the price after you’ve reviewed your discoveries with them. For example… “First of all, Mr. Smith, when you brought your car in this morning, you said you were concerned about a couple of different things, so tell me if I’m missing something here. You said the brake pedal was going down quite a bit, and you also said you needed to have your Mustang back by 4 o’clock. If I remember correctly, something about an anniversary dinner; is that right? “Well look, I have some really great news for you. When it comes to your brakes, and being able to have you out of here by 4 o’clock, we’re going
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to be able to solve both of those issues for you. As I mentioned this morning, the person who inspected your Mustang is Jim Piraino. He’s an ASE Master-certified technician, he’s been with us for 12 years now, and, I have to tell you, he’s really gifted at what he does. “Now, we’ve taken a look at all of your service records, and I’m actually
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Sales tip: Always ask for permission to talk about the price after you’ve reviewed your discoveries with customers. looking at a copy of Jim’s inspection report, so let me tell you what we discovered. First of all, I’d like to say congratulations on taking good care of your vehicle because your battery, tires, suspension and drivetrain all appear to be in good, operable condition. But, in addition to the brakes, there are a couple of other things that I’d like to chat with you about. “So, if it’s OK with you, let me tell you what Jim’s discovered, we’ll have a conversation, then I’ll be more than happy to answer any questions you might have, and we can also go over the prices at that time. Are you onboard with this approach, Mr. Smith? Terrific!” 5. If they can’t authorize everything, and you need to prioritize,
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always start with what they brought their vehicle in for, followed by anything that has to do with their personal safety, then the safety of others, followed by vehicle maintenance and comfort items. 6. Never compromise your ethics. If you do the right things for the right reasons, and if you never put money ahead of people, it will resonate with your customers. Combine your shop’s ethics with the above guidelines and you have my promise: you and your customers will be thrilled with the results. SO
Since 1990, Bob Cooper has been the president of Elite Worldwide Inc., www.EliteWorldwideStore.com, an ethics-based company that helps both struggling and successful shop owners take their businesses to new levels through one-on-one coaching from the industry’s top experts. The company also offers shop owner sales, marketing, and management seminars, along with service advisor training. You can contact Bob at contact@eliteworldwidestore.com, or at 800-204-3548.
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“We’re on a first-name basis with almost all of our customers. We are big enough to handle all of our customers’ service needs, yet small enough to maintain a personal feel.” –Steve Fowler, Owner
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Shop|Profile|
by Debbie Briggs, contributing writer
Steve’s European Automotive
Delivers 30 Years of Top-Notch Customer Service Steve Fowler has learned a thing or two when it comes to owning and operating a successful independent automotive repair shop. Even though he opened his namesake shop 30 years ago, Fowler says he’s always working to better not only his business, but his employees and customer service as well. For Fowler, Steve’s European Automotive is the shop it is today for four main reasons. “It really comes down to having the right people at the service counter,” he says, “as well as building relationships with customers and making them feel that they are more than just a number to you. It’s also investing in your staff with top-notch training programs. Finally, you have to provide your employees with the tools and equipment that they need to properly and efficiently do their jobs.”
Google program that recorded new customer calls, and I realized that I had the wrong people answering the phone,” he says. “They were actually driving customers away with the manner in which they were handling the potentially new customers on the phone.” As a result, Fowler says he decided to invest in a new phone system that recorded all
Customer Service Done Right While it sounds simple, Fowler has had 30 years to get it right at Steve’s European Automotive in Waterford, MI. Even then, Fowler says he learned the hard way a few years back that something as simple as a phone conversation can mean the difference between a lost repair job and a lifelong customer. “I had signed up for a
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Customers new and old alike appreciate the w that greets them when d phone calls. The new system provided much-needed flexibility in programming and other helpful features. “One of the first things I did was program an option in the greeting that prompted first-time callers to press 1,” he explains. “By doing that it directed most of the first-time callers to my phone, and if I wasn’t available, it would roll over to my son’s extension. I found that this was extremely beneficial in closing more appointments with new customers. Now I answer the phone much less, and we use the phone system for training our service advisors on how to answer the phone properly.”
Customer Appreciation Fowler makes it a point to ensure
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that each customer’s vehicle repair is as painless as possible by offering some helpful customer service programs. Some of those offered to patrons at Steve’s European Automotive include complimentary loaner vehicles, as well as available lowcost rentals, and an oil change card that rewards customers with their sixth oil change free. In addition to those programs, Fowler says customers new and old alike appreciate the welcoming atmosphere that greets them when dropping their vehicles off for service. What makes the shop unique are the two distinct waiting areas decorated with care by Fowler’s wife, Teri. “One is more of a work area with a little more of a private feel because it’s away from the customer activity that
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goes on at the service counter,” Fowler says, adding that “the French doors can be closed for even more privacy.” For customers who don’t require the solitude, the other waiting area near the front desk is available with a variety of amenities. “We have specialty coffee, bottled water, hot chocolate, Wi-Fi, cable television and a computer that customers can use,” Fowler says. “We hear compliments regularly on how comfortable our customers feel.
My wife really did a great job creating the look and feel that it has.”
Top-Notch Training While the seven techs at Steve’s European Automotive service all European makes and models, Audi and Volkswagen constitute the largest percentage of repairs. In addition to traditional services such as oil changes and alignments, the shop is also an APR distributor, installing performancetuning products on Volkswagen, Audi and Porsche vehicles. The shop’s status as a Bosch Service
e welcoming atmosphere n dropping their vehicles off for service.
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Center allows technicians to take advantage of the many training sessions the parts supplier offers. Classes offered by WORLDPAC, Autologic and EDR round out training for techs, who are also ASE-certified as well as certified by the State of Michigan. Fowler says staff members attend weekly shop meetings to discuss opportunities to put their training into practice and improve processes. “One of the topics we discuss at our weekly shop meeting is tech time management,” he says. “I feel that our technicians, service advisors and other related personnel have an opportunity to learn and be reminded about the importance of TTM. This also gives them a chance to share input on ways to improve our processes so that individually, and as a whole, we can increase our productivity.”
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Investing For The Future While Fowler has relied on word-of-mouth to attract new employees, low turnover means he hasn’t had to do so very often in the shop’s history. Just as employees are encouraged to provide input on shop productivity, they also provide valuable input on everything, from which tools to purchase to choosing a new shop logo. “We run a very transparent business
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The team at Steve’s European Automotive.
by keeping the lines of communication open with our employees,” Fowler says. “I like to involve our employees in the decisionmaking process when it comes to tools, equipment
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and changes to the shop. “We also offer a very good benefits package,” he adds. “We have an IRA retirement plan, health, dental, optical, life insurance and AFLAC. We have an annual company campout and Christmas party as well.” It’s that kind of attention to detail that not only helps employees feel appreciated, but also shows customers that they’re more than just a number. “We’re on a first-name basis with almost all of our customers,” Fowler says. “We are big enough to handle all of our customers’ service needs, yet small enough to maintain a personal feel.” With that kind of philosophy, Steve’s European Automotive is sure to enjoy success well into the future. SO
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Shop|Management|
by Vic Tarasik, owner, Vic’s Precision Automotive
Managers Set The Tone For Employee Morale Morale as defined in Merriam-Webster is the mental and emotional condition (as of enthusiasm, confidence or loyalty) of an individual or group with regard to the function or task at hand.
As independent repair shop owners, we all strive to have a successful, profitable business that secures a great lifestyle for us and our family. We are in different regions of the country and operate shops that range from small operations to mega-shops. We serve different cultures, demographics and have a broad spectrum of car counts. Albeit, one common thread we have is that each of us has employees. And, one thing I’ve learned over my 26 years as a shop owner is that the higher the morale and brighter the shop
environment is, the better the quality of the work that’s produced and the higher the hours each employee produces. I solicited the input from three successful shop owners across the country to get their input on employee morale and team building. While each has a different business model, I consider them to be among the finest shop owners with whom I’ve been associated. Each has annual single-store sales in the seven-figure range, and have operational efficiencies that are in the top of the industry.
Mirroring The Leader
Mike Maloney, owner of Convenience Auto Service, a single store operation in Ann Arbor, MI, has been in partnership with Lou Lippert for 10 years now. Mike and Lou started out servicing only Subaru vehicles, but quickly expanded into a full-line import Convenience Auto Service
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shop that has added major domestic vehicle repairs to its service offering. “I always go out of my way to catch someone doing something right! Then, I tell them how proud I am of them,” says Mike. Many shop owners don’t realize that compensation is only one component of employee retention. Employees stay and thrive in a place where they feel both challenged and appreciated. “A business often takes on the personality of the leader,” continues Mike. “If the leader is positive, upbeat and treats customer right, the employees will, too. If the guy at the top is cranky, moody or tough on people, employees often act out the same traits when interacting with customers.”
Everyone Is More Secure With a Big ‘Bank Account’ Brian Bates runs a multi-shop operation, Eagle Automotive Service, in Littleton, CO. His philosophy toward his employees has helped grow his business from a small, five-bay shop to being able to add a second location (an eight-bay shop), and he now is actively looking for a third location. Brian’s approach stems from the “emotional bank account” thought process. “If you point out a problem with an employee’s behavior, you need to point out at least three things that he/she is
doing correctly in order to keep your account balance ‘in the green’ with your team members,” he explains. It’s also important to focus on the employee’s behavior, continues Brian, rather than judging the team member, by saying, “This is what you’re doing,” versus “this is what you are.” Brian focuses on the behavior that should be complimented or needs to be adjusted, while taking into account that he’s dealing with a person who is a strong asset. It doesn’t take much to turn around an employee’s temperament when you can demonstrate that you value his/her contributions to your business.
Charting The Course Last is Casey McGowan of Casey’s Independent Automotive in Vancouver, WA. Casey and Kim opened their business on Sept. 11, 2001, and built it from a small operation into one of the nicest facilities I’ve seen as I’ve traveled across the country. I consider their shop to fall into the “mega-shop” category. Casey’s business has grown at a tremendous rate since I’ve known him; what began as a six-bay business has now expanded into a
Eagle Automotive Service
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Casey’s Independent Automotive
tive leaders can do in our industry, and the success of their shops bear this out.
Leadership
massive 16-bay facility. He and Kim moved into a new facility three years ago and the company’s growth has been amazing. Each year, his business has grown by 30%. He has a drag racing background and knows how a high-performance culture operates, and he’s created one of his own at Casey’s Independent Automotive. Casey explains his philosophy this way. “I feel that as the owner/manager/captain of the ship, having and painting the vision for the business and being able to give that to your employees is one of the most important and difficult tasks we do. “Beyond that, so is asking them to trust us, empowering them to do and learn things they may not have thought important in the past, shining a light on a dimly lit industry, and simply reminding them that what they do every day is a good, respectable, valuable service. We ask our employees to be professional and act professional. Likewise, I feel it is so important to treat them as such, as true professionals.” As you can see, Mike, Brian and Casey demonstrate toplevel leadership traits, and, by doing so, they set the tone at their shop and make sure the morale is at a very high level. They model what strong posi-
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Employees yearn for sound, quality leadership where their talents are recognized and their shortcomings are not used as a strike against them. They want to work for people who are upbeat and have vision. A survey of employees cited in the book Love ’Em or Lose ’Em indicated that compensation was number seven on the list of why people work for a particular company. More than anything, they want to be valued for their contributions and feel like they are part of the team. Your employees are the linchpin of your company’s success. Providing a secure workplace where you set a positive tone will ensure you retain the best people, so they will be with you as you grow your business and experience success together.
Resources • Love ’Em or Lose ’Em, $18.73, Amazon.com. • The Carrot Principle: How the Best Managers Use Recognition to Engage Their People, Retain Talent and Accelerate Performance, $17.59, Amazon.com. SO Vic Tarasik is the owner of Vic’s Precision Automotive, The Woodlands, TX, a 30-year industry veteran and long-time 20 Group member. His 10-bay, 7,000 sq.-ft. shop specializes in customer service, in addition to expert vehicle repairs. Vic can be reached at vic@vicsprecision.com.
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by Mary DellaValle, editor
Buying|Selling|An Aftermarket Business
Executive Q&A, Part 1 Art Blumenthal MBA, CBI Nationwide Automotive Aftermarket Business Broker In the first of a two-part series, we delve deep into the process of selling a business by interviewing Art Blumenthal, nationwide automotive aftermarket business broker, who provides business valuations, exit planning, and buying and selling advisor services. If you’ve considered the following topics regarding your own business, information contained in this interview may be of assistance to you: • Is reaping the rewards of selling your business for the highest cash price, either in the short term or long term, a priority to you? • Are you concerned about having to make new investments in inventory and equipment to grow the business? • Do you fear that further changes in tax rates or a reduction in the value of your business in the future may result in lower net proceeds if you wait too long to sell? • Or, are you thinking about growing your business by adding another shop? • Or, maybe you just feel excited that the time is right to take it easy and enjoy retirement or pursue a different venture? Why should a shop owner considering buying or selling an auto service business use a business broker?
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The process of buying or selling a business requires dedication and the attention of a professional with the knowledge of the complete flow of a business transaction. The process is often an “emotional rollercoaster” for both seller and buyer, as described in a case study regarding the sale of Hermansader’s Garage published in the November/December 2012 issue of Shop Owner. Marketing and facilitating a business transfer is a full-time job! You deserve someone who will work as hard as you do. A qualified broker will save business owners and prospective buyers money by helping them avoid costly mistakes, effectively marketing the appeal of the business, and maximizing exposure to serious, qualified buyers — all with complete confidentiality. Are there questions a seller should be asking himself when considering using a business broker? If you are interested in selling
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your business and don’t know the answer to any of the questions below, you could benefit from the assistance of a professional broker (and you are not alone!): • How do you reach qualified buyers without disclosing your intentions to sell to employees, customers and suppliers? • How do you evaluate your business objectively to ensure you receive top dollar for your investment and avoid costly negotiating tactics? • How do you prepare and provide the information a prospective buyer will require to interest him in pursuing your business in favor of other options? • How do you find a cash buyer or assist in securing financing for the buyer, to avoid giving risky seller financing, where your payoff is tied to the competence of the buyer and the economic conditions in the marketplace? • How do you market your business in all of the appropriate markets, databases and media efficiently, costeffectively and confidentially? • How do you screen and pre-qualify buyers, determine their motivations, managerial capabilities and financial strength? • How do you effectively sell your business, devoting significant time, effort and resources to that process, while continuing to manage your ongoing business productively and at maximum profitability?
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• How do you avoid serious mistakes that cost you money or result in legal battles, even after the sale is concluded? Business owners have focused their entire lives on growing and developing their businesses and seldom know how to answer all of the above questions. The sale of your business demands a professional, just as running your business has demanded your professional attention. It’s not uncommon for a good broker to successfully exceed your selling price expectations, over and above the fee that is paid for his/her professional services. Do you have professional tips that a shop owner can use to sell his automotive service business for top dollar? As a busy automotive service shop owner, the topic of selling your business may be something you haven’t considered at all, or it may be on the back burner, or perhaps it’s front and center in your plans right now. Regardless of where you stand, it’s never too early to start planning ahead to ensure that when you’re ready to make your exit, you will maximize the sale price of your business and minimize the potential headaches, including the tax consequences, involved in the process. If you’re serious about maximizing the sale price, perhaps the most important thing to remember is that selling your business should not be viewed as an event, but rather as a “process.”
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Important elements of the process include: a) Business Valuation is Tied to Cash Flow To price your shop to sell, make sure that you price your business “right.” You don’t want to price it too low, but you certainly don’t want to price it too high either…and be passed over by a serious buyer with financial resources. Keep in mind that what the business is worth to you — in terms of emotional value — may not match what the enterprise is worth in today’s market. Unlike selling a house or other real estate, an automotive business will be viewed by a buyer in terms of its “cash flow,” and your potential income stream will be compared by buyers to other investments in the marketplace. Most business owners, and their accountants, do their best to minimize taxes, not maximize profits. Remember that buyers are buying your cash flow more than anything else. While there are a variety of sophisticated methods of valuing a business, the bottom line is that the sales price of the business will likely translate to a multiple of the cash flow, so everything that can be done to present your business with the highest cash flow will directly result in a higher sale price. One of the biggest mistakes that a seller can make is leaving dollars on the table through an improper “recasting” of the financials that does not maximize the cash flow. Many sellers and brokers simply do not have the skills or don’t exert the time and energy to find legitimate add-backs to cash flow, such as “personal” expens-
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es that are run through the business. A broker who has industry-specific experience will have seen hundreds of financial statements for automotive businesses and, therefore, will know exactly which expenses to question as higher than industry norms. Overpricing or underpricing a business is a common mistake. It’s fine to be confident that you can successfully sell your business at a good price, but far too many business owners go into the selling process thinking that they will get top dollar simply because they believe that is what it’s worth…or what it was worth in its heyday. In the real world, true value is based on quantifiable criteria, not the seller’s emotional appraisal. Conversely, it’s also a mistake to state a price before knowing the full potential value of your business. Don’t sell yourself short by setting a price too quickly, even if you are burned out and highly motivated to retire, downsize or pursue other business interests. Remember, you can always come down, but it’s more difficult to raise your price once the marketing process begins. b) Timing is Critical to Maximizing the Sale Price Few business owners are lucky enough to sell their business at the perfect time. Too many owners wait until the last minute to decide to sell their business. They wait until business is down, or they are completely burned out, or their partnership has soured, or they have an unfortunate health issue, or perhaps their franchise or lease is close to expiration. The time to sell is:
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The time to sell is: • When business is good; • When you don’t have to sell; and • Before the emergency happens. • When business is good; • When you don’t have to sell; and • Before the emergency happens. Talk to other business owners who have sold and you’ll likely hear regrets that they did not sell at the most opportune time. By waiting, they may have encountered a new competitor, shrinking market share, a downturn in the economy, changes in neighborhood demographics, or an evolution in automotive technology that negatively impacts the aftermarket. The best time to sell is not necessarily now either. If your business has had a couple of down years and you have not yet turned the corner to positive sales and profit increases, then you can expect to see a decline in the value of your business and a longer time to find a qualified buyer. If you can muster the energy to breathe new life and profits into your business, retrain your people, increase your advertising and improve your customer service, then waiting to put your business on the market may be the path to maximizing your sale price. If you honestly don’t have this energy, then chances are it’s best for you to sell quickly, as the value of your business may drop dramatically if the negative trend continues. If you decide to hold off on marketing your business, it’s still smart to
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obtain a base-line valuation for your business today. As mentioned earlier, the simple exercise of going through the valuation process teaches a business owner how a prospective buyer determines an offering price. Reviewing your cash flow on at least a quarterly basis and updating the valuation will provide you with valuable insight into whether or not the changes that you have instituted are having the desired effect and yielding a quantifiable and positive return on your investment in time and money. How does an automotive aftermarket shop owner choose the best business broker to suit his needs? If you choose to sell your business, take your time in selecting a business broker who you are comfortable with, one whom you feel will be by your side every step of the way. A careful decision is often made based upon a review of the “pros and cons.” Here are few of the potential “pros” for selecting Art Blumenthal, LLC to help you sell your business: • I have bought, sold and profitably operated several Midas shops and an auto service software company over the past 30+ years. Being an entrepreneur allows one to become experienced in all facets of a business — from opera-
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tions, to finance, to marketing, to ultimately selling the business. Now I can leverage that experience and expertise to be instrumental in the buying and selling process for tire and auto service owners and entrepreneurs. • I have been involved in the sale of more than 20 auto service businesses in the past year and specialize in only this type of business. • As a seasoned aftermarket professional representing you, I can relate to your challenges, target market your business to an existing and ever-expanding network of potential automotive aftermarket business buyers, and negotiate the best possible selling price. • I represent only a relatively small number of business owners at a time and provide the best possible level of direct communication and service. • I have the expertise, tools and professional team to market and sell your business successfully on a national basis. I’m a member of the International Business Brokers Association (IBBA) with more than 1,500 members nationally. All of my listings are promoted on the IBBA website. • I will strictly abide by the written standards regarding ethics and confidentiality established by the IBBA. • I’m a Certified Business Intermediary (CBI), which is the most highly regarded certification within the broker community and business professionals nationwide. • In many cases, the potential buyer
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of your business does not currently live in your area. The combination of my focus on building a nationwide automotive aftermarket database and the strength of over 1,500 broker affiliates is most likely going to generate multiple qualified buyers. • Creating competition among multiple buyers, rather than just finding a single buyer, is my goal. A buyer without competition feels free to offer less than the full value of a business. When a buyer knows that several other buyers are looking at the same business, they are hesitant to offer less than the price and terms being solicited. SO Look for Part 2 of this Executive Q&A in the January/February 2014 issue of Shop Owner, where we will address such topics as what affects the selling price, what a seller needs to do to help sell the business, how long it will take to sell the business, what fees are charged by a business broker and much more. Leveraging more than 30 years of experience as both an aftermarket business owner and aftermarket technology executive, Art Blumenthal LLC provides business intermediary and advisory services to both buyers and sellers of industry businesses of all sizes. Art is a member of IBBA (International Business Brokers Association, Inc.). For more information, or to initiate a no-obligation confidential consultation, visit www.art-blumenthal.com.
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“We strive to build relationships that go above and beyond just being our customers’ service and repair shop.” ~Tom and Cindi Potter
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Shop|Profile|
by Debbie Briggs, contributing writer
Japanese Auto Masters
Shop’s Customer Service Philosophy Hinges On The ‘Golden Rule’ Build it and they will come. Or, in the case of Tom and Cindi Potter, build it and then have to move again.
Tom and Cindi Potter have had quite the adventure when it comes to the location of their successful import shop, Japanese Auto Masters in Virginia Beach, VA. The husband-andwife team opened the shop in 1982 at a time when few independent repair shops focused on Asian vehicles. Originally located in a small shop near the oceanfront in Virginia Beach, Japanese Auto Masters had outgrown its small beginnings, and, in 1996, the couple started operations in a new 7,000-squarefoot facility next to Oceana Naval Air Station. Things were going along smoothly until 2005 when Tom and Cindi received a letter from the military saying that they were not in compliance with deeded restrictions on the property. “In December 2012, we sold that property and in January 2013 purchased an existing building,” Tom says. “We then
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had to reconstruct the interior of the building and added an additional 66 feet off the back. We now have a 10,000-squarefoot building, with a total of eight working bays plus one alignment bay.”
Customer Convenience The Potters recently held their grand opening, with refreshments available for customers, with a variety of service and parts specials throughout the month of November. Cindi says the first 100 customers to make an appointment also received a gift bag with a T-shirt, savings coupons, calendar and more. It’s just one more example of the Potters’ commitment to their patrons — no matter the location of the shop. “We strive to build relationships that go above and beyond just being our customers’ service and repair shop,” she
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Moving to a new facility has also allowed Tom and Cindi to consider ways to improve shop efficiency as well as profitability at Japanese Auto Masters.
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says. “We work hard to show our customers that we, too, are affected by the uncertain economy and share their concerns about financial decisions, especially where it involves service and repair of their vehicles and the associated cost.” In fact, the Potters have thought of everything when it comes to customer convenience in their new location. They offer shuttle service, a comfortable waiting area with free Keurig coffee, free Wi-Fi, a children’s play area and clean, customer-only restrooms. “We really wanted to make sure customers felt at home while they wait for their vehicles,” Cindi says. “The colorful and clean interior is anything but institutional and fits the bill nicely. We’re already getting compliments on it.”
Shop Efficiency Moving to a new facility has also allowed Tom and Cindi to consider ways to improve shop efficiency as well as profitability. Timely parts acquisition has helped improve repair times, but so has the installation of cameras throughout the shop floor. “Setting up cameras around the shop area has allowed us to see the location of a vehicle at any given time during the repair process,” Tom explains. “It’s helping to minimize any road blocks during service and repair.” The (ASE Blue Seal of Excellence) shop’s three ASE-certified Master Techs, two L-1 High-Performance Techs, P2-certified parts specialist and P2/C1-certified service consultant also appreciate the convenience new laptops have afforded, giving them the ability to quickly look up repair information right on the spot.
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“We also use Skype to communicate with each other when parts have arrived,” Tom says, “and for other daily needs around the shop. That way, we can quickly take care of any safety items or necessary maintenance issues with equipment.” In addition to new laptops, employees also enjoy many benefits at Japanese Auto Masters, including paid
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each employee to participate when classes are offered.”
Going Green Tom says recycling efforts began many years ago, and they continue at their new location. They recycle all paper, cardboard, cans, plastic bottles and plastic bags — pretty much anything and everything. “All scrap steel, aluminum and other metals, as well as catalytic converters, are turned in for recycle scrap,” he explains. “All good waste oil is used for our heating with an EPA-approved waste oil heater, and any spoiled or contaminated oil is hauled out for commercial recycling. All used antifreeze is recycled, and we’re in the process of purchasing an oil filter crusher.”
Customer Appreciation
vacation, holidays and sick days, complimentary uniforms, after-hours access to the shop for personal vehicle repairs, as well as health and dental insurance. Add paid training and testing to the list as well. “We generally send our employees to off-site NAPA training through our association as a NAPA Auto Care Center,” Tom says. “We encourage
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At the end of the day for both Tom and Cindi it comes down to perseverance, patience and persistence, as well as treating customers the way they would want to be treated. “Our company was founded on this principle and that is the essential reason we are still growing today,” Cindi says. “There are as many differences in customers and how each one wants to be cared for as there are similarities. We work very hard to treat each customer according to his/her needs, but, above all, with respect. Only by offering respect can one expect the same in return.” While customer service efforts are always evolving, the Potters will always come back to that philosophy — and stay put in their newest location for many years to come. SO
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by Tim Ross, president, Mudlick Mail
Customer|Service|
Creating Lasting Customer Loyalty Means Separating Your Shop From The Pack With visits to repair shops on the decline, building customer loyalty is more important than ever. Developing a large and stable database of regular customers can help eliminate the constant need to acquire new customers. Your loyal customers can also serve as a great referral source for your shop. According to the research firm The Gartner Group, 20% of a business’ existing customers generate 80% of that business’ profits. While providing good repair work is an essential component of customer satisfaction, perhaps even more important — when it comes to cultivating loyalty — is delivering exceptional customer service. After all, customers expect us to fix their cars. What they don’t expect is a convenient, easy and enjoyable experience. If you can excel in the customer service area, you will give customers a reason to return.
Making A Good Impression You may not realize that a customer’s interaction with your shop starts before they even walk in the door. A consumer is going to form opinions about your business based on your advertising materials, website, Yelp reviews and even the
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causes you support. Having a user-friendly website that features testimonials, photos of your shop and the benefits you offer customers is a great way to build trust with potential new customers. When it comes to advertising, make sure your offers are clear, easy-to-understand and easy to redeem. Your first conversation with a customer shouldn’t involve you explaining a confusing promotion. And don’t forget to monitor your online reputation. Addressing bad reviews will show your willingness to discuss concerns. So, what happens when a customer finally visits your shop? He or she should encounter a clean facility, staffed by friendly, articulate, well-groomed employees. If your lobby is packed with people, potential customers may
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fear a long wait and walk out. Avoid that scenario by processing customers quickly and offering conveniences, such as shuttles, so customers can get back to their busy lives. Remember, you have only a few seconds to provide a perception of integrity and superior service.
Separating Yourself From The Pack Serving customers well is tricky because the definition of what is considered excellent customer service keeps changing. Benefits that were once considered unusual, such as customer shuttles, repair warranties and extended hours on weekends, are now becoming the norm. To distinguish yourself, you need to focus on making the car repair process as easy as possible. When customers call about making an appointment, ask when the most convenient time is for them to come
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in, instead of scheduling appointments around when your technicians think they can squeeze in the repair. If necessary, you can move big repair jobs to accommodate less-intensive maintenance services and keep your shop running more efficiently. Don’t be afraid to tap technology to improve convenience and communication. You can incorporate an online booking form on your website to allow clients to communicate their appointment preference without them ever picking up the phone. Instead of having customers call you to receive updates on the status of their repairs, keep them informed via text or e-mail. New applications also allow you to send photos of needed repairs, inspection reports and estimates directly to customers’ smartphones and tablets. Efficiently managing the flow of cars through your shop and effectively communicating with customers will help you establish a reputation for strong customer service. But there is also an array of little things that you can do to push your shop into the “exceptional” category of customer service. Opening the door for
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customers is a nice touch, as is greeting customers by name (an easy trick for remembering names is to scan license plates when customers arrive and match plate numbers with names in your database). Providing free Wi-Fi if a customer chooses to work in your waiting room can make a difference. Using your shuttle to accommodate an unscheduled stop for a customer will allow that person to accomplish essential tasks and build goodwill for your shop. Just going above and beyond — whether that means washing cars after they have been repaired or sending thank you notes — will resonate with customers who usually have low expectations when it comes to car repair. Above all, don’t forget to say thank you to every customer every day.
make the time to establish customer service procedures. Don’t make that mistake. Create written standards outlining how you want your shop to look, how to handle customer inquiries and how to communicate during the repair process. Train employees on those standards and let them know you’ll regularly review their performance. Communicate often about changes in promotions and policies, so employees have the proper information when talking to customers. If you create a customer-focused culture, and then reinforce that culture through training and evaluations, you’ll give customers a reason to stay loyal for life. SO
Customer-Focused Culture
Tim Ross is president of Mudlick Mail, a leading provider of direct mail campaigns to the automotive repair industry. Mudlick Mail has worked with close to 1,000 automotive repair and transmission shops across the U.S. and Canada, helping them improve their car count and increase sales. The company teaches its clients how to understand consumer-buying habits and shows them how to create effective systems to maximize the value of their marketing campaigns.
You can have the best intentions of delivering unparalleled customer service, but if you fail to train your employees on how to treat customers, you’ll fall short. Unfortunately, this is where a lot of shop owners drop the ball because they either don’t have the time or don’t
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